Manage the financial risks of international travel

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Janine Starks is the author of www.moneytips.nz and can be contacted at [email protected] She is a financial commentator with expertise in banking, personal finance and fund management.

OPINION: While many of us are burned by vacation cancellations at the start of the pandemic, the travel industry rightly wants to be upfront about travel risks. This is commendable, because an international holiday is serious money.

There’s a lot of optimism about Kiwis making new international bookings, but I wonder how many are looking at the warnings and thinking, ‘Blimey, why the hell should I travel?’

We are told to buy expensive fully flexible tickets and we are warned that costs incurred by a border closure or local lockdown abroad will not be covered by our insurer.

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What is missing is a bit of perspective and balance. The international industry understands what it takes to regain travellers’ trust. Respecting our portfolio and finding solutions to our risks are part of this. Positive change has already happened.

Let’s go back and look at the changes:

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Marion van Dijk / Stuff

Janine Starks is a financial commentator specializing in banking, personal finance and fund management.

Airlines companies

Fully flexible, fully refundable flights cost an arm and a leg and I don’t think they’re necessary. Almost every ticket now has a level of flexibility. And almost all negative events that prevent travel (including Covid-19) are insurable.

For uninsurable issues such as a border closure, airlines are well aware of your location. In order to regain confidence in tourism, they work with customers to rearrange flights, give credits or refunds when they are not flying. Your theft money doesn’t go up in smoke just because an insurer won’t cover the event. Find out if the airline charges for changes and deadlines for using credits.

Accommodation booking sites have clear cancellation periods and filters to filter out the most flexible offers (file photo).

123RF

Accommodation booking sites have clear cancellation periods and filters to filter out the most flexible offers (file photo).

Hotels and excursions

Online booking giants such as Booking.com and Airbnb have clear cancellation periods and filters to filter out the most flexible offers. Online technology now plays an important role in facilitating travel changes.

Closure of New Zealand borders

I’m going out on a branch here. I don’t believe a New Zealand government will block our citizens again. While MIQ can never be dismissed as a tool, the refusal to scale up has been lambasted internationally and is being sued locally.

Closure of foreign borders

This is a scenario that insurers do not cover. While this may seem like a plausible risk to us, other governments have closed borders sparingly over the past 12 months.

Overseas governments have closed borders sparingly, such as when France blocked Britons at the start of the <a class=ski season but reopened a few weeks later (file photo)” style=”width:100%;display:inline-block”/>

Caroline Fernandez/Hans Lucas/The Washington Post

Overseas governments have closed borders sparingly, such as when France blocked Britons at the start of the ski season but reopened a few weeks later (file photo)

The instances were short and specific to each country. For example, the French locked down the British at the start of the winter ski season in December 2021, but reopened a few weeks later when Omicron spread. It was not without warning and many Britons opted to travel early to enter France and hit the snow. All travelers already in Europe had no problem.

If you get caught in the middle of the holiday, it’s still not a disaster. I have personally traveled at a time when Portugal blocked direct flights to the UK due to the Kent variant and the UK returned the favor due to a Brazilian variant.

Despite all this, flights via Paris were still possible and this was the modified route. With large populations of people working overseas and dispersed families, most situations can be resolved and have exemptions which are sorted at the airport.

With the prospect, other nations don’t operate like New Zealand and there is always a solution – or warning time – given.

Local interlocks

This is another insurance exclusion. You arrive in a country and they can impose a local confinement. Even when it comes to regional checkpoints, I have found that tourists have exemptions.

Car rental companies are still operating and you can move on to your next hotel or friend you visit. You will have to follow their rules, but this is unlikely to incur significant additional costs. In the current climate, lockdowns are no longer a method of choice and those risks have diminished significantly.

Travel insurance

Take out a New Zealand based policy as soon as you book your holiday. If you book three months in advance, you have plenty of time to break a leg, have a heart attack or catch Covid-19 just before boarding the plane. The insurance covers this important period between booking and take-off.

With the vast majority of tourist destinations on the SafeTravel website listed as “Level 2, be extra careful”, insurance is now available. Take the time to read each insurer’s Covid-19 clauses as I have seen miserable levels of cover (budget level hotel allowances for those needing to recover from an infection).

Your airline cannot take you on board without checking that you comply with vaccination rules (file photo).

Getty Images

Your airline cannot take you on board without checking that you comply with vaccination rules (file photo).

Entry rules for vaccination, booster and testing in each country

Your airline cannot take you on board without verifying that you have complied with the rules. They will send you emails reminding you to upload proof of vaccination, a tracking form and Covid-19 test results if needed.

Being pre-verified gives peace of mind. Border experiences are now much smoother with spot checks, since airlines do much of the work. Locator forms are also becoming a relic, with Greece scrapping the forms on March 15 and the British set to scrap them by Easter.

Some countries never had one in the first place.

Pre-flight and arrival Covid testing is a thing of the past, but double check as we are in a period of flux (file photo).

LIBBY WILSON/Stuff

Pre-flight and arrival Covid testing is a thing of the past, but double check as we are in a period of flux (file photo).

Covid-19 tests and local health passes

Pre-flight and arrival testing is also a thing of the past, but double check as we are in a period of flux. One tip, the “RAT” in New Zealand is often known as the LFT (lateral flow test) in other countries.

Major airports have rapid test centers and booking details on their websites. It is possible that the only test you will need is when you get home.

The use of Covid passes to enter indoor venues and restaurants is also being phased out in various countries. The French stopped the Sanitary Pass on March 14. The English have no rules, with masks optional and isolation in case of infection left to common sense.

Opinions are personal and general in nature. They do not constitute a recommendation for anyone to buy or sell any financial product. Readers should always seek specific independent financial advice tailored to their own circumstances.

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